On January 1, 2020, Northeast Transportation Company purchased a usod aircrat at a cost of $58.900,000. Northeast expects the plane to remain usetul for five years (7,200, 000 mies) and to have. a retidual value of $4,900,000. Northeast expects to fly the plane 750,000 miles the first year, 1,375,000 miles each year during the second, thed, and fourth years, and 2,325,000 miles the last year, (Click the icon to view the first year depreciation amounts under each method.) Rend the fequirements. 1. Which depreciation method offers the highest tax advantage for the first year? Doscribe the naturo of the tax advantage The method olfers the tax advantage for the first yoar of the assers use. The advartage results from the anount of depreciation (versus the other methods) in the first year. This methed also produces the cash that the taxpayer can invest to eam moce income. 2. How much income tax will Northeast save for the first year of the aiplane's use under the method you just selected as conpared with using the straight-line depreciation method? The company's income tax rate is 34%. ignore any earnings from investing the extra cash. (Round the degreciation rates to tho decimal places. Round your final ansaters to the nearest whole doted On January 1,2020, Northeast Transportation Company purchased a used aircraft at a cost of $58,900,000 Northeast expects the plane to reman useful for five years (7,200, 000 mies) and to have a residual value of $4,900,000. Northeast expects to fly the plane 750,000 miles the first year. 1,375,000 miles each year duting the second, third, and fourth years. and 2,325,000 miles the last year (Click the icon to view the first year depreciation amounts under each method.) Read the resuirements 1. Which depreciation method offers the highest tax advantage for the first year? Describe the nature of the tax advantage. The method offers the tax advantage for the first year of the assets use. The advantage results trom the amount of depreciation (versus the other methods) in the firstyear. This method also produces the cash that the taxpayer can invest to oarn moxe income: 2. How much income tax will Northeast save for the first year of the airplane's use under the method you just selected as compared with using the straightline deprecason method? The company's income tax rate is 34%. lgnore any eamings from investing the extra cash. (Rouns the deprociation rabes to two decimal places. Round your final answers to the nearest ehole doliar) Reference